Larry Givens is senior partner of Gamma Group Consulting, Santa Ana, California, which specializes in improving organizational effectiveness and implementing strategic programs. He recently retired as associate vice chancellor for facilities at the University of California/ Irvine. He is a member of APPA's Strategic Assessment Model Task Force and can be reached at lrgivens@usa.net.

APPA's Strategic Assessment Model, referred to as SAM, is an essential tool that can be used to achieve organizational excellence through continuous improvement. SAM enables the facilities professional to assess an organization's financial performance, the effectiveness of its primary processes, the readiness of employees to embrace the challenges of the future, and the ability to delight customers. Managers can utilize the model for self-improvement, peer-comparison, and benchmarking and realize the benefits of developing high performance organizations. SAM is the vehicle that starts the journey from today's reality to future excellence.

The purpose of this article is to simply explain what SAM is and how to use it. It will start by highlighting why facilities professionals are becoming increasingly aware of the need to improve their organizations and implement a continuous improvement program. There will be a brief overview of the features of the two most accepted models for continuous improvement in higher education. The first is the Malcolm Baldrige National Quality Program and the second is the Balanced Scorecard. A general understanding of these two models is essential in utilizing the power of SAM to transform your organization. SAM incorporates features from both improvement models and provides a consistent vocabulary for continuous improvement, regardless of which improvement model the campus may be using. It will conclude with simple instructions on how to implement SAM as a continuous improvement program for your organization.

Why Improve?

Facilities professionals are facing greater demands for accountability and improvements than ever before. They must be aware of the varied interests of their stakeholders and satisfy their requirements. Trustees are interested in ensuring that resources are efficiently and effectively utilized for the greatest needs of the institution. Customers have become more demanding for the delivery of cost-effective services that are high quality and sufficient to meet their own mission requirements. Employees have greater expectations of their leaders and have personal needs that must be accommodated within the workplace environment. Of course, facilities professionals have their own values that drive them to seek improvements. With a strong sense of personal responsibility and commitment to the institution, facilities professionals recognize their role as leaders to strategically plan and prepare their organization to meet the challenges of the future.

The first of the two models for continuous improvement is the Malcolm Baldrige National Quality Program. Baldrige is generally recognized as the premier continuous improvement program in the country. It was established over a decade ago as a program to stimulate businesses to focus on quality and continuous improvement. Its primary objective is to prepare businesses to meet the demanding challenges of an ever- increasing competitive market environment. Each year, the criteria for performance excellence are updated and refined to ensure that it truly emphasizes the factors that will make the greatest difference in improving an organization and achieving performance excellence.

The Malcolm Baldrige Criteria for Performance Excellence is the basis for organizational self-assessment, for making the award, and for giving feedback to applicants. The core values and concepts of the program are embodied in seven main categories and nineteen subcategories. Baldrige takes a very comprehensive look at every aspect of an organization. It evaluates seven major categories:

Baldrige examiners use a set of scoring guidelines to evaluate the approach, deployment, and results of an organization submitting an application. You will see later that SAM has adopted the qualitative scoring guidelines of Baldrige to determine the level of performance of an organization.

The Department of Commerce is responsible for the Malcolm Baldrige National Quality Program and Award. The National Institute of Standards and Technology (NIST), Department of Commerce, manages the program. Additional information regarding the program can be obtained by going to http://www.nist.gov.

It is interesting to note that more than a million copies of the Baldrige criteria have been distributed; yet typically only 50 applications for the national award are submitted each year. The vast majority of businesses that are interested in the criteria are using it as a process for self-improvement, rather than a means to win an award.

The second model for improvement is the Balanced Scorecard. The Balanced Scorecard is a concept developed by Robert S. Kaplan, professor at the Harvard Business School, and David P. Norton, president of Renaissance Solutions, Inc. They developed it as a tool for managers to mobilize their people for achieving organizational goals.

The scorecard with its four perspectives--financial, internal business processes, learning and growth, and customer--provides a balanced picture of current operating performance, as well as drivers for future performance. While the concept primarily addressed the needs of businesses, its success and acceptance has also been growing very rapidly in the public sector. Since the public sector is more interested in developing organizations to meet the challenges of the future than it is with growth, the third perspective is usually referred to as innovation and learning.

The Balanced Scorecard integrates financial and non-financial measures, such as customer satisfaction and employee work environment, to show a clear linkage to organizational goals and strategies. Goals are developed to achieve an organization's vision for the future. They become the roadmap to the desired outcomes. Goals established by departments and units become more specific further down the organization's hierarchy. They show how the units will participate in the overall goals of the organization. Managers define and implement strategies or action plans for accomplishing each of the goals. They also establish performance measurements to indicate the progress obtained in accomplishing their strategies.

The Balanced Scorecard is a management tool for communicating goals and strategies throughout an organization, as well as for communicating progress and status of the strategies for accomplishing the goals. Each department and unit develops its own Balanced Scorecard for its own strategies. A well-constructed Balanced Scorecard for each unit would clearly show how the unit plans to contribute to the overall success of the organization through its goals and strategies for the four perspectives--financial, internal business process, innovation and learning, and customer.

The SAM Model

APPA's Strategic Assessment Model (SAM) combines features of both the Malcolm Baldrige program and the Balanced Scorecard. SAM has three components: the four perspectives of a Balanced Scorecard, the quantitative performance indicators, and the qualitative criteria for determining the levels of performance of an organization in each of the Scorecard perspectives.

The one-page SAM matrix illustrates the three components of SAM, which are combined to assist facilities professionals in assessing their organizations and carrying out a continuous improvement program. The Balanced Scorecard, in the upper portion of the matrix, represents the concept of pursuing continuous improvements in all perspectives in a balanced manner. Key performance indicators have been identified for each perspective. The lower portion of the matrix outlines the criteria for determining levels of performance. There are five levels of performance, which can be applied to each perspective. The levels of performance range from the lowest, Level 1 Copper, to the highest level of performance, Level 5 Platinum. The qualitative descriptions for determining the five levels are very similar to the scoring guidelines used by Baldrige examiners when evaluating award applications.

In defining the four perspectives of the Balanced Scorecard, the SAM Task Force decided to use the more comprehensive definitions of the Malcolm Baldrige program wherever possible, rather than the general definitions used by Kaplan and Norton. By including the Baldrige criteria in defining the perspectives, the continuous improvement program implemented with SAM would be more consistent with the national program for quality. The four perspectives are:

  1. Financial Perspective reflects the organization's financial performance in ensuring financial integrity and demonstrates stewardship responsibility for capital and financial resources associated with the operation and preservation of physical assets throughout the campus. Financial performance indicators are tracked to ensure that services are delivered in an efficient cost-effective manner. The Financial Perspective is linked to the other perspectives through the relationships between cost and the results in achieving the other scorecard objectives. An example would be to understand how improving internal processes or customer satisfaction correlates with increasing or decreasing costs. Another might be to determine how financial benefits are derived from improvements in employee safety, absenteeism, and turnover. Primary services include those for operations and maintenance, energy and utilities, and planning, design and construction. (Combines Baldrige categories 4.1, 4.2, and 7.2.)
  2. Internal Process Perspective addresses the key aspects of the organization's process evaluation for the delivery of primary services. These services would include those for operations and maintenance, energy and utilities, and planning, design and construction. Examples of processes supporting these may include handling of work orders, procurement, billing, and relationships with suppliers. Evidence should show that processes for delivering services are efficient, systematic, and focused on customer needs. There is an emphasis on identifying opportunities for improvements and measuring results. The SAM performance indicators are intended to be representative measurements that apply to these processes. (Combines Baldrige categories 6.1, 6.2, 6.3, 7.4 and 7.5.)
  3. Innovation and Learning Perspective addresses key practices directed towards creating a high performance workplace and a learning organization. In a learning organization, people at all levels, individually and collectively, are continually increasing their knowledge and capacity to produce the best practices and possible results. The perspective considers how the organizational culture, work environment, employee support climate, and systems enable and encourage employees to contribute effectively. Work environment and systems include work and job design, compensation, employee performance management, and recognition programs. Training is analyzed in how well it meets on-going needs of employees and develops their leadership and knowledge sharing skills to improve efficiency and accommodate change. There is an emphasis on measuring results relating to employee well being, satisfaction, development, motivation, work system performance, and effectiveness. (Combines Baldrige categories 5.1, 5.2, 5.3, and 7.3.)
  4. Customer Perspective addresses how the organization determines requirements, expectations, and preferences of customers to ensure relevance of current services and to develop new opportunities; builds relationships with customers; and measures results of customer satisfaction and performance of services. Primary customer groups include faculty, staff, students, customer representatives and decision-makers for customer departments, and other significant stakeholders. Primary services would include those for operations and maintenance, energy and utilities, and planning, design and construction. (Combines Baldrige categories 3.1, 3.2, and 7.1.)

The key performance indicators are provided in the SAM model as samples of measurements that can be used by facilities professionals to obtain a snapshot of their organizations at a point in time and to trend their results over an extended period. The performance indicators are by no means the only measurements that should be used. Quite frankly, we have a very difficult profession to measure. The complexity of the organizations and the vast variety of services provided add to the difficulty of identifying simple measurements that tell the whole story. While no single measurement will be adequate, using numerous indicators will help facilities professionals to triangulate onto a more accurate status of their organization. The facilities professionals who are challenged by this difficulty, rather than using it as an excuse, will identify numerous opportunities for continuous improvement.

A complete description of the performance indicators can be found at the APPA website (www.appa.org/sam). Just go to the SAM Matrix and click on each of the indicators for more information about its application.

APPA is also planning a survey for this spring to collect data on a selected number of the performance indicators, which will be published later this summer. The task force has selected performance indicators for the survey that can be used for comparison between institutions. Some of the other performance indicators are more appropriately used for internal comparisons and trending of specific processes. Periodic surveys will validate the use of the performance indicators and provide feedback and suggestions for refining them or developing more appropriate indicators. SAM will continue to evolve as a greater number of the profession deploys it as a continuous improvement tool for their operations. The performance indicators should become better over time as they are refined with actual experience.

There are five levels of performance: Level 1 Copper, Level 2 Bronze, Level 3 Silver, Level 4 Gold, and Level 5 Platinum. The medal classifications are carried over from the original SAM concept, where performance indicators were used to determine levels of performance. The current concept uses a qualitative approach, similar to a Baldrige evaluation. The levels of performance apply to each of the four Scorecard perspectives. An organization may be at a different level for each perspective. The following briefly describes the differences in the five levels of performance.

Level 1--Copper: There is no systematic program evident. Only anecdotal information is available as to how scorecard perspective objectives are being satisfied.

Level 2--Bronze: The program is beginning to show a systematic approach to satisfy scorecard perspective objectives, even though it may be for only one or two areas. Major gaps exist in deployment. The organization is transiting from reacting to problems to a general improvement orientation. Trends show some improvements in a few areas. The reference to trends implies that data has been collected for at least two different periods of time. Level 2 cannot be accomplished without showing improvement from some baseline period.

Level 3--Silver: At Level 3, the continuous improvement program is fully deployed. There is a sound, systematic program established for satisfying the scorecard perspective. A fact-based improvement process is in place for most primary areas. Emphasis is placed more on improvement than on reacting to problems. Improvements can be measured and substantiated. Performance trends show improvement in many to most primary areas with no adverse trends noted. Some trends and/or performance levels are evaluated against relevant comparisons from similar institutions. Results show areas of strength with good to very good relative performance levels. Those organizations performing at a Level 3 are quite exceptional. Even though there are two higher levels of performance possible, a Level 3 is really a well running organization.

Level 4--Gold: Very few organizations can reach this level. The operative words describing this level of performance are "refinements" and "cycles of improvement." In addition to a history of making improvements, there is clear evidence of refinements to previous improvements that made them even better. The improvement program is fully deployed for all primary areas. Performance trends show cycles of improvement in many to most primary areas. Most improvement trends and/or performance levels are sustained over cycles of data collection. Current performance is good to excellent for most areas with no adverse trends. Most trends and/or service levels are evaluated against relevant comparisons or benchmarks from similar institutions. Results show areas of leadership with very good relative performance levels.

Level 5--Platinum: Level 5 is a stretch goal, or possibly "only in your dreams" goal. The program for continuous improvement is so well established that work centers throughout the organization are collecting their own data for measurements and are carrying out very effective continuous improvement programs. A Level 5 organization has a very mature and sophisticated improvement program. Current performance is excellent for most primary areas with no adverse trends. Most trends and/or service levels are evaluated against relevant comparisons or benchmarks from other similar institutions. Some are benchmarked with outside industries. Results show areas of leadership with excellent relative performance levels.

How to Apply SAM

The easiest way to use SAM is to just start where you are. There is little need to pay too much attention to the higher performance levels in the beginning. The most important part about starting a continuous improvement program is to take the first step, however small it may be. Once making a small improvement, the next one is only a step away. So goes the pattern for continuous improvement.

An organization just starting to use SAM will likely be Level 1 or 2 for most of the scorecard perspectives. A few may already have mature continuous improvement programs, which could qualify for higher performance levels. It really does not matter where you start. Just get started doing something. For example, start collecting information for at least one service area. Pick one. Improve a process, find out what your customers need and expect, and determine what kind of work environment is necessary to prepare your workforce for the future. Then, expand your program by including another service area and giving attention to all four Scorecard perspectives in a balanced manner.

Those who want to fully capitalize on the advantages of the Balanced Scorecard as a management and communications tool are encouraged to link their continuous improvement program with their goals and strategies for achieving their vision. The institution's goals can be realigned to a Balanced Scorecard. Some goals that contain more than one perspective may need to be rewritten or broken down into two separate goals to better fit the Balanced Scorecard format. Goals for facilities departments show how the organization would achieve the institution's goals and vision. Strategies and performance measurements are established to track progress in accomplishing the desired results of the strategies.

Conclusion

SAM incorporates features of the Malcolm Baldrige Quality Program and the Balanced Scorecard to achieve organizational excellence through continuous improvement. As a strategic tool, SAM answers the basic questions of strategic planning: where you are, where you are going, and what is needed to get there. With a minimum of understanding of the SAM model, almost anyone can make a quick assessment of the level of performance of an organization for each scorecard perspective. From there, one can easily see what is needed to move to the next level. This difference between the two levels will form the basis for developing action items or strategies to move an organization to the next level of performance, the next step.

What you do with SAM and how far you go is your choice. Have fun and enjoy the journey to organizational excellence.